DP15455 Migration and Fiscal Externality: US vs. Europe

Author(s): Assaf Razin
Publication Date: November 2020
Date Revised: November 2020
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Programme Areas: International Macroeconomics and Finance
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=15455

The paper compares migration policy and welfare state generosity between America and Europe. There is more selective skill-based migration policy in the US compared to the European Union. Policy coordination among states within the federal system on migration, taxes, and social benefits among states within the US federal system is stronger than among countries within the European Union. Fiscal externality, triggered by migration and tax competition among members of the federal system may explain in part these US-Europe differences in policies.